On Wall Street, the future of the nation’s largest banks, from Citibank to Bank of America, remains uncertain as the Dow Jones Industrial Average continues to slide. On Main Street, however, community banks appear to be in better shape than their Wall Street counterparts. The future for Main Street banks like Apple Bank or Bridgehampton National Bank seems calm, and perhaps, even bright.
The steady course of East End based financial institutions can be attributed to the business choices they made in recent years. As larger institutions lent money to riskier borrowers and made more adventurous investments, local banks say they created realistic mortgages and invested conservatively.
“We maintained a credit standard when we looked at loans,” said Kevin Santacroce, a senior credit officer at Bridgehampton National Bank. “At Bridgehampton, we took the time to sit down with customers and [created] loans with the expectation of getting paid back . . . In the shorter term, it seems like we are hurting the people who weren’t accepted [for the loan], but in the longer term we are helping them avoid being in insurmountable debt.”
According to Doug Shaw, Senior Vice President of Suffolk County National Bank, lending conservatively was business as usual for community banks not just on the East End but nationally.
“Many community banks tended to their nettings,” said Shaw. “As a consequence they didn’t get involved in many of the financial instruments you hear about in the media . . . It isn’t just banks on Long Island, but across the country.”
Steve Bush, the Executive Vice President of Apple Bank, added that his company placed only 20% of their overall investments into mortgages.
Although many East End banks are publicly traded, Shaw added that these banks maintain close relationships with their customers and also feel responsible to these customers.
“Most community banks know their customers better than larger institutions. When you know your customer well, you know what it will take for them pay under any circumstances,” said Shaw.
A few years ago, as mortgages were sold from one institution to another, Sanatacroce said many banks lost sight of the customer and focused merely on making a profit from the transaction. At Bridgehampton National Bank, Santacroce said he has worked with a few customers who had trouble making payments. For people whose mortgages were sold from one company to the next, it is often hard to find a person to talk with about restructuring their payment schedule. “When they made the loan, they were [often] sold right away, so the person who they sat down with when the signed the loan isn’t the person they can go talk to,” said Santacroce.
As national financial institutions continue to go belly up, many local residents are taking their business to community banks. In 2008, business at Bridgehampton National Bank grew by $200 million, which was a record year for the publicly traded company. According to Santacroce, the company’s stock price remains relatively flat despite the volatile fluctuations of the market. Bush, of Apple Bank, said his bank netted a profit of almost $30 million last year.
Santacroced adde that Bridgehampton National Bank is still well capitalized, meaning it still has a great deal of money to lend.
Shaw of Suffolk County National Bank said community banks good standing in terms of capitol is a key reason people are switching to local banks.
“We have the ability to give them the kind of lending larger institutions simple cannot access [right now] because of their colossal losses,” said Shaw.
Local banks, however, have only recently had the upper hand in the banking world. Santacroce remembered almost ten to fifteen years ago people said community banks would be forced to close down as larger banks set up shop on the East End.
“I believe there will always be a place for smaller community banks,” said Santacroce. “People don’t realize that banking is a very personal relationship . . . Finances are personal . . . And people need the person-to-person type of relationship when they are talking to someone about their finances.”

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